News of the Day March 15, 2013

QUOTE OF THE DAY:

 

Keep your eyes on the stars and your feet on the ground.”

Franklin D. Roosevelt

 

FOCUSES ON CARRIERS, BUT APPLIES TO AGENTS

MOBILE A KEY PIECE IN INDUSTRY’S CUSTOMER EXPERIENCE PUZZLE 

March 14, 2013 • 

 


PropertyCasualty360.com

 

If you stop and take a look at any technology, mobile
has quickly become the most dominant entity. With the rise of smartphones,
mobile has become an extension of us, as opposed to just a way to communicate—m
ost of
the approximately six billion mobile subscribers across the globe will agree

[SIX OUT OF SEVEN  IN THE WORLD!]. With 23 billion connected devices by 2020, d, this mindset isn’t changing anytime soon, and it’s
already having an enormous impact on the insurance industry.

With the current challenges of rising costs
and the increasingly complex process of submitting a claim, insurers can take
advantage of leveraging the mobile channel to increase revenue, reduce costs,
enhance the customer experience and improve operational efficiency. According
to Capgemini and EFMA’s World Insurance Report 2013,, insurers need to invest in the mobile
channel, —
and it’s becoming the channel of choice for a number of customer
interactions. Even with this trend, companies need to insure a mobile app supplements the overall experience and doesn’t dominate it.

Additionally,
the ROI on investing in mobile within the industry is easily more than 30% of
current claims processing costs. This alone is evidence that insurers should
embrace the mobile channel; but more importantly, 20 % of consumers say
that mobile policy information is critical when selecting an insurance
provider.

Insurers
See the Value in Mobile

Many
insurers are pursuing integrated multi-distribution strategies with a high
priority on creating mobile capabilities so consumers can easily evaluate and
buy an insurance product, submit claims online and more. Key examples of
current offerings from leading insurers include:

  • GEICO and Alfa  have Leveraged the mobile development platform, Kony, to deliver capabilities to
    both business-to-consumer and business-to-enterprise. They have also developed
    “mobile insurance agents” that can be accessed from any smartphone.
  • Liberty Mutual  has developed proprietary apps so users can take pictures of
    damage, view policy details and add claims. Their website also offers mobile
    access for anytime, anywhere service. 
  • State Farm has Created a
    “pocket agent” which allows consumers to find an agent, file a claim, make a
    baking deposit, or even get road-=side assistance. They’ve  also developed a mobile
    website for easier access on the go.
  • Progressive has produced
    a VIN capture app that allows users to get quotes, submit claims and report
    vehicle damage. Customers can also access a mobile website fr to perform policy
    changes and payments.

 

Mobile Can Solve Many Issues

Mobile is
an important answer to the challenges the insurance space has by simply
offering several capabilities in a flexible way. Customers want access no matter
where they are, and, the mobile channel is the perfect way to ensure
that’s possible.

In
addition to “standard” content customers can find in a mobile app—such as their
policy number or payment due date—there are effective ways to make these
offerings deeper with additional features. For example, insurers can better
incorporate marketing, services, and sales departments to ensure as many
customer touch-points as possible. This can easily roll into membership and
enrollment to allow customers to sign up for a policy—from there they can make
payments through finance and accounting features.

If a
customer is unsure of what type of policy they need, mobile apps can integrate
“e-advice” for personal insurance plans. The app can also remember who the
customer’s personal insurance advisor is, and provide ways for them to keep in
touch and build a relationship

If a
customer gets into an accident, an insurer’s mobile app should allow an easy
way to file a claim immediately, and even use location-based services to track
where the accident took place. From there, customers can process a claim, and
when it’s ready, they can track Payout.

It’s All in the Implementation [APPLIES TO
AGENCIES USING SM]

 

Of course, the idea of a mobile app is something that’s pretty
standard in today’s world. To ensure success in delivering the mobile channel
effectively, implementation of specific strategies is needed.

  • Define the experience: Lay
    out the proper requirements needed for a positive customer experience. This can be done effectively by story-boarding what type of experience you want to
    provide.
  • Design with the customer in mind: Make sure that you’re giving enough time to test several
    UI designs so that the application flows well. Design a prototype to ensure
    it can be tested before releasing it.
  • Build and Test: Provide ample time to review, test and
    develop the app, keeping different OS platforms in mind.
  • Implement: Make sure that  the app  integrates properly ith other aspects of the multi-distribution approach.
    Acceptance and integrating testing is critical for success.

 

Mobile Can’t Do Everything

 
Although basic capabilities are available, not everything can be
offered simply through an app.
There is no doubt that immediate results would
be seen if the mobile channel integrated some of these capabilities, but it
doesn’t beat meeting with an agent
[HIGH TOUCH AND HIGH TECH] While nany people prefer online and
mobile channels hen trying to find the best
insurance rate or comparing plans, customers still want to talk to someone in
person.
The trust aspect of building a relationship with an agent is supreme,
especially when there is no physical product to be had.
Customers need to feel
like their insurance company has their best interest in mind, and this is
something that can’t be replicated with an app. [
KEY ADVANTAGE OF THE INDEPENDENT AGENT] 

Luckily, insurance companies understand the fact that while mobile
app availability is important, it’s part of a bigger puzzle to ensure a
positive customer experience. Capgemini and EFMA’s  Word Insurance Report
2013 notes that insurers are focused on developing multi-distribution
approaches  that integrate mobile effectively
to meet all types of customer needs to maximize impact on the value chain and
more importantly, increase customer share. There is no doubt that this is a
balancing act.

In Connected World, Mobile Is Critical

 

If I had to take one key point from the Capgemini and EFMA’s
World Insurance Report 2013, it’s that it’s critical for the insurance
industry to take a hard look at the reality that is the mobile channel and how
important it is to sustainable success.
Mobile is a lifestyle—not just a way to
communicate—and most of the 6 billion plus mobile consumers use their devices
to pay bills, read news or shop. Insurers need to be a part of this by quickly
bringing to market effective and fun mobile applications. In the end, the
customer experience is what matters most.

 GREAT MARKETING
OPPORTUNITY FOR AGENTS!

TWO THIRDS OF TENANTS DON’T CARRY RENTERS INSURANCE 

 Insurance News Report

3/13/13

by Alicia Williams 

 

Two in three  Americans who rent their home are risking all of their
possessions.
A recent study has just
revealed that only 34% of American tenants currently have active Renters
insurance,
which means that the majority of them are taking a gamble with all
of their belongings if they ever experience a fire, burglary, or other peril
that is typically covered by the policy.

Among the most commonly cited reasons that those without
coverage gave was cost.

However,
at the same time that tenants were saying that it would be too much money to
purchase a policy, they survey also showed that many of the respondents were significantly overestimating  what it
would actually cost to insure their belongings. This suggests that a large number
of people are forgoing Renters insurance based on inaccurate information.

More than one in five survey participants felt that Renters insurance would cost $1,000 per year
or more.

Among respondents, 60% said that they felt that the cost of Renters insurance was probably $250 or higher. Another 21%
stated that they felt that it was $1,000 or higher per year. According to the
National Association of Insurance Commissioners (NAIC), the average policy cost  only around $185 per year.

Another Renters insurance
misconception, said the survey, is that people believe that it protects them
only against theft. However, there’s a great deal more coverage offered by the
standard policy than this one element.

The
survey identified the leading reasons for not purchasing as:

• The rented home has a
high level of security so the tenant feels it is not required (57%).
• The policy would be too expensive (52%).
• The landlord already has coverage for the building (48%).

Unfortunately,
each of those reflects a misunderstanding of what renters insurance has to
provide. Even the last point shows that many tenants don’t realize that the
landlord’s insurance covers the building, but nor tenant’s own liability or for his or her belongings. The typical Contents
policy will provide coverage for possessions, liability, and additional living
expenses in the case that the unit should become unlivable,

 

INSURANCE WILL PICK UP THE $16.9 MILLION
TAB IF ANDREW BYNUM SITS OUT THE SEASON

 

By Kelly Dwyer 

 

Insurance Networking News

March 13, 2013

It’s not exactly the most warming of stories in this economy
– one millionaire will still be paid even after a season-long sick day, while
another group of millionaires will be able to save money – but it is
interesting to note that the
 Philadelphia 76ers s will not be on the
hook for
  Andrew Bynum’s s salary should he sit out
the entire season. Bynum, who was dealt to the Sixers last August and has
missed the entire season with a right knee injury, will still get every penny
of his $16.9 million salary even if he doesn’t play a minute this year —  and the
Sixers are off the hook for that compensation due to the insurance they have on
their investment.

 

“There is league-wide insurance that he’s
under,” Sixers president Rod Thorn said Wednesday before the team hosted
the Miami Heat. “There is some relief along those lines.”

Thorn did not say how much of Bynum’s
salary would be covered by the insurance. However, he said that the Sixers
would get full relief because there are no preexisting conditions that would
prevent Bynum’s coverage.

There is some schadenfreude to be enjoyed here. For years, insurance companies have either denied claims, refused service, or trumped up
bills in order to deny affordable health care to those suffering from even the
most minimal of pre-existing conditions. Yet Bynum. a player, known to
have troublesome knees since the winter of 2007, will cash $16.9 million worth
of insurance company checks this season while sitting out with issues even the
most basic of sports fan has known about for a half-decade.

It’s  fine to
take issue with Andrew Bynum’s absence.
 His rehabilitation
setback occurred last fall when he injured his knee while bowling – a sport
that sounds innocuous enough until you consider the pressure a recovering knee
is placed under once you have to stop on a dime in order to fire the ball down
the lane.

He’d also, if you wouldn’t mind, like it if you would allow
him to return from a significant knee injury at his own pace.
 Bynum isn’t sure if he’ll return this year  because he kind of wants the rest of his life (you know, the
part past your mid-30s that most people get to enjoy without crippling pain) to
go as normally as possible. He’d like to walk normally..

In a more cynical take, it’s worth noting that if Bynum
returned to play too early on a knee that wasn’t ready, he could re-injure it
to a point that would force microfracture surgery. This surgery
works — it’s been proven through more than a decade. However, the procedure would
knock a year off of Bynum’s career, and hamstring his attempts on the free
agent market this summer.

The biggest loser in all this will be the insurance company
that has to pay Andrew Bynum $16.9 million for absolutely nothing.

News of the Day March 13, 2013

QUOTE OF THE DAY:
“The first and best victory is to conquer self.”
Plato
GOOD NEWS, BAD NEWS

AGENTS HANG ONTO P/C MARKET, BUT LOSE GROUND IN PERSONAL AUTO: STUDY

By Andrea Wells  

Insurance Journal
March 11, 2013 
After experiencing dwindling premiums for years, the Property/Casualty insurance industry managed to grow substantially in 2011. 
Independent agents and brokers hung onto their share of the market with some independent agency carriers gaining in market share by double digits, according to the newly-released “2013 Property & Casualty Insurance Market Share” study published by the Independent Insurance Agents & Brokers of America (Big “I”).
Independent agents still control a majority of the Property/Casualty market, writing 57% of all premiums. Independent agents dominate over other distribution systems in Commercial Lines, while also writing a third of Personal Lines premiums, the Big “I” report reveals. 
 Where agents appear to be falling short is in the Personal Auto market where direct writers managed to grow their Personal Auto premiums 10 times faster than Independent Agency carriers. [A MAJOR THREAT FROM THE GEICOS OF THIS WORLD]
This challenge remains a concern and opportunity for the Independent Agency channel, says Madelyn Flannagan, co-author of the Big “I” report that tracks how the Independent Agency channel is doing compared with other distribution systems.
Regional Independent Agency carriers fell slightly in market share in Personal Auto from 26.4% in 2010 to 26.3% in 2011, Flannagan said.National carriers lost more. “They’ve dropped down from 7% of the market to 6.7% of the (Personal Auto) market,” she said. “Those are insignificant percentages, but they represent billions of dollars in premiums.”
That premium is moving straight to the direct response channel, she said.
Direct response carriers managed to grow Personal Auto premiums in 2011 by $2 billion, according to the report. “That’s a significant amount of money in this marketplace,” Flannagan said. “Certainly, independent agents have a lot of work to do to make up their losses.”
There is some good news for Independent agents in the Homeowners insurance market, where Independent Agency carriers made significant gains in market share, the study revealed. [GOOD NEWS]
“The national Independent Agency companies saw gains of about $350 million over 2010,” Flannagan said. “Regional carriers wrote $1.4 billion more in 2011 than they did (in 2010) and increased their volume by 7.8%.” Regional and national Independent Agency companies retained about 53% of the growth in the last year across all channels, Flannagan said.
“There was a really impressive result in the Homeowners market by the Independent Agency System,” she said. “Although we don’t have the majority of market share, we’re gaining market share in Homeowners insurance.”
Overall the Commercial Insurance market made a huge rebound, which greatly benefited the Independent Agency System.
Independent agency carriers’ Commercial premiums grew by 5% in 2011 compared to 2010 figures. Those same carriers captured $8.4 billion in additional premiums in 2011, which represents 74% of the entire $11.4 billion growth in that market, according to the study.
The report shows that Commercial Auto saw tremendous growth, growing about 2.9%. Workers Compensation also saw significant gains. “Those are two lines that have been sort of stagnant over the past several reports — they show a resurgence in our economy, we hope, and a growth for independent agents in the next couple of years,” said Flannagan.
Independent Agency carriers grew premiums and/or market share in several states, the report said.
In Commercial Lines, independent agents are seeing some, but not huge improvement in many states, Flannagan added.
Maine and West Virginia are the leaders in Independent Agency share of the Commercial Lines market. Maine and West Virginia had the highest market shares, at 86.2% and 85.7% respectively, and Delaware had the lowest share of Commercial Lines, at 60.2%.
Although some states posted gains for Independent Agency carriers, it’s a different story for some others.
“We’re beginning to see several states over the past couple of years beginning to lose some of their market share,” Flannagan said. The Independent Agency market share decreased by more than 1% in 11 states, including three states that were down by 2 percentage points or more.
Vermont was down 5 points to 79.7%, Kansas was down 2.1 percentage points to 72.1%, and Oregon dropped 2 percentage points to 63.9%. “They are dropping some market share in Commercial Lines,” she said.
In Personal Lines, Independent Agency carriers are losing ground in some Northeast states where they have long enjoyed dominance.
“Independent Agency companies had the largest market share (in the Northeast),” she said. But now, “we’re beginning to see some declines in those areas brought on by regulatory changes in the marketplace and many more competitors.” States feeling the impact include Delaware, Maryland, Massachusetts, and Rhode Island.
States seeing some growth in Personal Lines market share include Florida, where independent agents gained 1.2 percentage points to 41.1%, and Utah where they gained 1 percentage point to 28.2%. Minnesota was the only other state to gain 0.5 percentage points or more in Personal Lines, up 0.7 percentage points to 33.0%
A MAJOR CHALLENGE – AND OPPORTUNITY – TO SHARE WITH TM PROSPECTS AND MEMBERS
TO FIGHT IN PERSONAL AUTO, AGENTS MUST TAKE CONTROL OF INTERNET, MOBILE COMMUNICATION
BY Phil Gusman
,PROPERTYCASUALTY360.COM
March 12, 2013 
 
Future success for independent agents depends in part on them continuing to fight for their share of the Private-Passenger Auto- market, and to do so, they can’t continue to cede domination of the Internet and mobile communication to direct writers, a new report says.
The Independent Insurance Agents & Brokers of America (IIABA) released its “2013 Market Share Study,” which analyzes 2011 year-end industry market-share and company-expense data from A.M. Best. While IIABA reports mostly good news for the industry and independent agents – Property/ Casualty premiums grew in 2011 across all lines, with national and regional independent-agency carriers seeing 3.1% and 4.8% premium growth respectively — the association highlights continued challenges for independent agents in the personal-auto space.
In 2011, IIABA says, direct writers’ market share in Personal Auto crossed the 17% mark. “One in every six dollars in personal-auto premiums generated was through the direct-response channel in 2011,” IIABA says.
The year before, in 2010, IIABA notes, “The success of direct advertising, combined with the ease of online purchasing, helped direct-response firms grow premiums in 2010 by $2.0 billion.”
By comparison, the association continues, regional independent-agency carriers increased premiums by $500 million while national independent-agency carriers saw premiums decrease.
“To continue thriving into the future, the independent-agency channel must continue to battle for its share of private‐passenger auto,” IIABA declares.
To do so, independent agency must embrace and leverage technology to chip away at direct writers’ advantages on the Internet and through mobile devices. [THE HEART OF THE MATTER]
“Just because the technology challenges are slightly easier in their single‐carrier eco‐systems, there is no reason why direct-response channels should dominate usage of the Internet and mobile communication,” says IIABA’s report. “Independent agents and carriers can and should work to take full advantage of online technologies, both in acquiring new customers and providing service.”
Independent agents and carriers, IIABA says, should see these technologies as beneficial to their business, rather than as obstacles to establishing relationships with clients. “Rather than replace the agent’s relationship with the client, these technologies can become an effective customer connection tool that creates an opportunity for agents to develop relationships with new customers,” IIABA says. [HIGH TECH AND HIGH TOUCH]
For example, IIABA notes that customers seeking Auto quotes online will also need other types of coverages — Homeowners, Umbrella, At-Home Business, and Watercraft. [CROSS SELLING] Agents can also gain Commercial Lines business in this manner if the customer owns her or his own business or influences business-policy decisions.
“Statistically, it’s likely that many customers who shop for Auto online are open to establishing a relationship with someone who can act as a trusted advisor [THEME OF THE BIG I]  to help them understand risk and protection in today’s economy,” contends IIABA. “The challenge then becomes one of on-boarding and post‐enrollment communication and outreach in order to have the opportunity for important needs‐assessment
conversations.”
However, agents can do more with Personal Auto than just use it as a springboard to gain additional business. IIABA notes the stress that can come from the process of filing an auto claim, and adds that personal agents can provide excellent service both before and during the event. [PERSONAL SERVICE]
“Enduring personal relationships are something that the direct-response writers cannot copy,” IIABA says.

JOHNNY FOOTBALL SEEKS INSURANCE PROTECTION FROM INJURY
March 6, 2013 
Business Insurance
Texas A&M quarterback and Heisman Trophy winner Johnny Manziel acknowledged this week that he is seeking an insurance policy to guard against the possibility of an injury that would threaten a future career in the National Football League.
The sophomore signal-caller told reporters after a recent practice that his parents were in the process of securing an insurance policy to afford him the type of protection that the offensive line of the Aggies cannot provide.
“It’s just a precaution,” Mr. Manziel said. “Football is a dangerous sport, so you kind of have to make sure that you take a precaution in that regard.”
Because he redshirted his freshman year, the fleet-footed Mr. Manziel, also known as “Johnny Football,” will be eligible for the NFL draft in April 2014.

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